Contract Law and Tort

This assignment explores the concepts of contract law and tort, highlighting how these legal frameworks apply to diverse business scenarios. It delves into specific examples and situations where both contract law and tort principles come into play, allowing individuals to understand the practical implications of these legal concepts.

Unit 5: Aspects of Contract & Negligence for Business
Unit code: F/601/1271
Unit type: Core
Aspects of Contract & Negligence for
Business
Student Name:
Name of the Tutor:
Assignment/hand-out date: 26/09/2016
Deadline/hand-in date: 20/11/2016

Unit 5: Aspects of Contract & Negligence for Business
Unit code: F/601/1271
Unit type: Core
Title Aspects of Contract & Negligence for Business
Introduction
1.1 Explain to Peter Abraham how a contract is formed and the importance of the various elements
which has to be present to form a contract.
1.2 Discuss the impact of forming contracts (as it may apply to Peter Abraham) by means of
i. face to face
ii. written contract
iii. distance selling (telephone, internet)
1.3 Give an analysis of the following terms in contracts with reference to their meaning and effect
(including remedies and damages) as it may apply to Peter Abraham.
i. condition
ii. warranty
iii. innominate terms
iv. exemption clauses (including legality)
2.1 Apply the elements of contract in the given business scenarios (Cases 1 and 2)
2.2 Apply the law on terms in the following cases (Cases 3 and 4)
2.3 Evaluate the effect of different terms in the given cases (Cases 5 and 6)
3.1 Explain the similarities and differences (contrast) of liability in tort with contractual liability using an
example.
3.2 Explain using suitable example how liability for negligence can arise and the conditions needed to be
met for a claimant to successfully prove negligence.
3.3 Explain what vicarious liability means and how a business such as your organization can become
vicariously liable giving example.
4.1 Apply the elements of the tort of negligence and defenses in the given business scenarios.
4.2 Apply the elements of vicarious liability in given business situations
Conclusion
Reference
Assignment/hand-out date: 26/09/2016
Deadline/hand-in date: 20/11/2016

Unit 5: Aspects of Contract & Negligence for Business
Unit code: F/601/1271
Unit type: Core
Introduction
The main focus of this assignment is to analyze and recognize the different components of Contract and
Negligence for business. Today, the business environment is filled with assertions between organizations
and people. Contracts that are composed provide people and companies with a record that express the
desires, gathering and how they are determined (Markides and Newman, 2013). Likewise, contract is
subject to court of law enforce ably. Organization can utilize their assets and shield them with the help of
a contract.
The objective of this assignment work is to give the information and details about the law of contract and
the principle that comes in each case. Applying and demonstrating of a valid contract and their different
parts of agreement. How to enter a contract, terms and condition evaluation, expressing and law
identification with agreement. There is some case which are interrelated but not totally same. We
examine and analyze the agreement of law. Such contractual agreements are not only evident to play a
greater role in businesses but together has a significant function in the life of individuals. It is where they
are required to handle such day to day operations that are often related to a legalized context of work. The
present report has depicted an elementary composition of a contractual agreement where the participants
heading into it are required to make a strict adherence towards its stipulated norms. It has together
represented yet another existence of negligence in a contract where this in turn results in breaking the
undertaken laws with its clear disruption. This consequently results in a prior intervention of legal bodies
as bestowed in the later part of this report.
Task 1
1.1
The following elements required for formation of a contract:
Offer and Acceptance: Agreement containing offer and acceptance, it is a presence of an offer and an
acceptance of dissect the whole procedure to choose weather agreement has been made, if so when it was
made. In Harvey v. Facey (1893) it was opined that the offer shall be attached with an intention to create
a binding relation. Another important thing is that reaching common term of the party is essential for
understanding (Andrew, Ewan and James, 2007). Both these elements called offer and acceptance
shows a prior intercession of two superior parties called offerer and offeree where an offerer hereby refers
to propose something to another party named offeree also known as accepting party. Wherein, an offer
consists with some liable terms and is needed to be accepted within a given time period by duly
informing the offerer about the same. However, in case one fails to do so, then the proposed offer can
also get terminated.
Consideration: This is the worth given by the party as a guarantee that should be made. Cash, property,
goals, administration manifestation generally comes under consideration. In Thomson v. Thomson (1842)
consideration shall necessarily be valid, and any past consideration shall disqualify the contracts. This
connotes the reciprocal nature of these relationships, wherein one party suffers and the other party
benefits. Moreover, it is important that the consideration shall be completely lawful in nature and shall
not be in past. It has been opined by the court that consideration is not required be adequate in nature, it is
acceptable if it is sufficient in nature. It moves from the promisee and plays the role of supporting the
promise made by the parties.
Consent: It refers to a party that does not enter onto assertion readily, then understanding is not achieved
so it would be invalid (Shulman and et. al., 2010). Peter should take it in consideration. It is highly
imperative for the parties to give free consent to formation of contract and the minds of all the parties
Assignment/hand-out date: 26/09/2016
Deadline/hand-in date: 20/11/2016

Unit 5: Aspects of Contract & Negligence for Business
Unit code: F/601/1271
Unit type: Core
shall meet at same point. Further it is also required that the consent of parties is received on the same
terms and is not influenced by any of the elements of fraud, misrepresentation, and so on.
Capacity: If a party have limit have the ability to enter the introduction to a legitimate contract. Capacity
is the main element; peter should build the capacity to have genuine mental approach to enter a contract
with organizations. In De Francesco v. Barnum (1890) it was opined that only parties who are competent
in terms of age, capacity and so on shall enter into a contract (Hovenkamp, 2015). Moreover, it is also
required that the parties are mentally and financially capable to enter into contracts, and be capable to
perform each of the promises or terms mentioned in the contract. The competency of a minor is subject to
an exception of necessity contract, wherein a minor is allowed to enter into contract in cases of necessity.
Hence, there have been various judicial pronouncements which have opined that though a minor is not
competent to formulate a contract, in cases of necessity law allows them to create a valid contractual
relationship. Moreover, these minors cannot be made liable for non-compliance.
Certainty: Peter should attain certainty in his approach to avoid damages and should have clarity. All the
terms of an agreement ought to be clear. The terms of the contract must be certain and clear by the parties
otherwise court will not consider it as a legal document. If any duty of the agreement is incomplete by the
parties then it will not consider as contract and not enforced by the parties.
Lawfulness: any type of lawfulness is a better approach for any agreement. I would like to advise to peter
that he should go for lawfulness. In contracts lawfulness have to be obtained because it will be beneficial
for him. In the simple word the contract is protected by lawfulness. The object and purpose for which the
contract has been formed shall be lawful in nature, and shall in no way be contrary to any of legal
frameworks. Any consent to disregard the law or any assertion illegal by law is void. Contracts are illicit
for two explanations: firstly, in light of the fact that their article is unlawful: besides, since despite the fact
that the item is superbly legitimate, the way of making it is against the law.
1.2
Face to Face
It is a type of contract which is done between two parties by face to face. It will help to peter to do an
agreement for his contract. In face to face contract both parties can negotiate to their terms and conditions
and both parties can compensate to each other. In this contract peter, can make his verdict. It is the main
feature of a contract. These form of contract are entered into by parties orally when they are present
before each other. In such cases there is no scope for mistake of identity as the parties are present before
each other for verification. However, these contracts lack certainty as the terms are negotiated in a oral
manner and are not written down anywhere to be referred in future. Thus, the probability of conflict
situations is very high existence of ambiguity in the terms (Kaneko, 2010). Parties verbally decide the
terms by the conversation between each other.
Written contract
Written contract is an important form of making contracts between parties. In case of written contract
peter can be secure by the written documentation of a contract. In written contract, he is totally safe by
any misconception because the contract is in the written form and he will be benefited by this contract.
Both parties have accepted and signing agreement and keep agreement copies which is essential for them.
These are the agreements which business enterprises prefer to enter into as it provides certainty in respect
to the rights and obligations which are a result of the contractual relations. Hence, these are in the form of
a document which may even be registered in certain cases, and is possessed by all the parties who are
Assignment/hand-out date: 26/09/2016
Deadline/hand-in date: 20/11/2016

Unit 5: Aspects of Contract & Negligence for Business
Unit code: F/601/1271
Unit type: Core
party to the relation. It is a valid contract where parties specify all the duties and rights in the contract
which should be binding on the parties and enforceable by law.
Distance selling
Distance selling is a contract which is going to be essential for peter. It is a type of contract which can be
made by various facility like internet where you can make agreement between each other. it may be
verbally by means of telephone mobile or etc. Through this agreement he can communicate for his
distance selling and it can be benefited for him. These are the contract which are entered into when the
concerned parties are not present before each other. Hence, the medium of telephones or email is used for
negotiating the terms and formulating the contracts. In the present times this form of contract is being
utilized for online shopping as the customers are present all around the world and buy products.
There are some other contracts by types which needs to be understood as well:
Unilateral contract: It is a contract in which someone is making offer in return to some act. There is only
one party who is bound to complete his duty and no other person have any force to do an act (Huang,
Luo and Xia, 2013).
Bilateral contract: when offer is made in return for offer. It is a two sided contract that makes promise
between the parties to complete a task. Both are bound to follow all the right which they have specified in
the agreement.
Simple contract: It is in written form, but also can be verbal.
Standard Contract: It is well documented by both parties.
Verbal contract: It is well documented though, but it is mostly done verbally. This contract made by the
parties by way of many communication mode like Telephone, TV, internet and any other.
1.3
There are some terms which are essential while doing business. These are explained below:
i. Conditions:
A condition is an integral part of contract which acts as a basis. If a condition is not achieved or break, it
will cause problems and considered denial of a contract. And if a side is affected by it then the contract
may get terminated. In Peter case, he should fulfill clients condition as a builder otherwise he may get
nothing out of a contract. In the case of Poussard v. Spiers (1876) the court upheld the repudiation of
contract in case of breach of the terms of the agreement (Markides and Newman, 2013.). Conditions:
Conditions refers to major and important terms of a contract. It is the base for a contract. If any term is
not fulfilled or breached the whole contract is compromised. They are the warranties that should be
fulfilled. Contract is considered complete if the terms are completed accordingly. Condition being the
most important term of a contract is required to be adhered by the parties in a well defined manner.
Wherein, these terms are also required to be well informed to each of the participant's for abiding by the
same. However, on violating the stipulated terms of condition, the entire contractual agreement is
breached by terminating it forever. In such situation, the parties are together required to seek the
assistance of law to resolve their existed issue either as a way of getting into a new contractual term of
completely breaking the agreement with one other.
ii. Warranties:
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Deadline/hand-in date: 20/11/2016

Unit 5: Aspects of Contract & Negligence for Business
Unit code: F/601/1271
Unit type: Core
Good warranty is a security for a contract. It does not act as a basis for any agreement but give security to
it. The warranty can be helpful against claims by any side (Conditions, Warranties and Innominate
Terms, 2016). So, Peter should consider having warranties. These are the ancillary or supplementary
terms which play a supporting role in performance of contract. However, breach of these terms does not
entitle the parties to terminate the relations, however they can claim damages for all the losses or injuries
sustained due to non-compliance by the other party.
iii. Innominate terms:
It is not possible for any agreement to predict anything unless terms especially innominate terms are met
successfully. It may help Peter in most of the cases. Because of these terms the affected party may get
some help for their damages. So, these terms are very important and needs to be considered all the time.
By fact, law, custom and trade usage, it is easy to deal with these terms. In case of Hong Kong Fir
Shipping (1962) these terms were propounded to be judged on the basis of the impact posed on the parties
to the agreement, in the event of breach of terms of the contract (Anson and et. al., 2010). These are
intermediate in nature, and cannot be classified in the two types of terms. Hence, the classification is done
by the courts on the basis of impact of non-compliance of these terms. Hence, in the event of fundamental
consequences the terms shall be characterized as condition and all the relevant legal principles shall be
made applicable. On the other hand if the impact is not fundamental in nature, and the parties are still
able to perform the contract the court shall classify the terms as warranties.
iv. Exemption clause:
This clause is a part of contract where a person excludes from his liability which results from the act of
conduct of a person. It can be unfair in the eye of law because it may give disadvantage to the another
person (Hak, Kovanda and Weinzettel, 2012). This clause incorporated in the contract and if a person
suffers from personal injury then it will not be a valid clause. In the case of Olley v Marlborough Court
(1949), court held that the exemption clause incorporated in the contract were too late. In case of
Houghton v Trafalgar Insurance (1954) there was an exemption cause. Insurer had a clause in his policy
and it is unfair for him. Insurance company could not be exempt from liability. It only uses where parties
work with fairness in the contract.
TASK 2
2.1
Case 1 - Agreement
Carols need his apartment get furnished and shows interest in buying the leather couch. At this point she
has shown interest. But she will wait to see what the seller is offering. The seller response is vital here, to
get to an agreement we have to look at both sides. This is a case of invitation to treat, which was
explained in the case of Fisher v. Bell (1961). It was opined in the case that a mere invitation to the public
to make an offer does not form a constituent of formation of the process (Giliker, 2010). Further in case
of Pharmaceutical Society of Great Britain v. Boots (1953) it is established that products on sale or
advertisements are merely an invitation to offer and cannot form a valid contract. Therefore, due to lack
of elements of contract there is no binding agreement between the parties. To make a valid contract there
must be the communication by the parties by giving their consent to each other.
Case 2 - Consideration
In the given scenario, Gorge already hired Devi and Devi does not know that his father made an offer. In
light of the case it can be inferred that the consideration to the agreement did not exist at the time of
Assignment/hand-out date: 26/09/2016
Deadline/hand-in date: 20/11/2016

Unit 5: Aspects of Contract & Negligence for Business
Unit code: F/601/1271
Unit type: Core
making the offer, and in consequence there is no privity of contract. In accordance to Tweddle v. Atkinson
(1861) an agreement attached with a past consideration cannot be considered as a valid or binding
agreement, and hence in absence of privity of contract George is not entitled to the stipulated amount
(Kozolchyk, 2013).
2.2
Case 3 – Exclusion clause
It is the right of restaurant owners to not refund because there was a clear message to keep things save.
We as a restaurant not responsible. After strictly rely on the exclusion clause. They should find the man
who did this, because customer care is important for any business. If your business has satisfied clients or
customer, then you are doing good. Restaurant should strictly follow the policy they have set. But at the
same time find the person responsible so in future there should be no such incident. A person may have
various clause in his contract but there should be the valid term which need to be followed by the parties.
A person cannot excludes from his liability if any person suffered from the damage. Then mentioned
clause is an exemption clause, and was explained in Parker v. SE Railway Co. (1877) as the term of the
contract which limits or restricts the liability of one of the parties in the event of breach of the agreement.
Therefore the restaurant can take resort under the shield of exemption clause (Collins, 2016).
Case 4 – Implied term
In business, the most value is keeping your promise. If Zehphra died, then her promise should be kept
despite the increase in property. Ethics is very important in any field of life. For the period of 5 year he
should be allowed with the same rent morally. This term is implied by the Law and there are so many law
that has implied conditions. In the Sale of Goods act consumer should have the standard quality of goods
from its supplier. Goods must be the satisfactorily quantity as mentioned by the customer in his demand.
In accordance to business parlance every landlord is liable to bear the cost of repairs, or reimburse the
same to the tenant (McKendrick, 2014). This is an implied term and hence is entitled to be enforced at
par with express terms in accordance to Shirlaw v. Southern Foundries (1939). In the present case the
decision of Yeti to terminate the agreement is completely in violation of the contract, hence, Aaron is
entitled to compensation for the period of 5 years, in accordance to law.
2.3 Evaluate the effect of different terms in the given cases (Cases 5 and 6)
Case 5 and 6
Answer
For both cases, the policyholder lied and hide the facts, which is breach of conditions, warranty and
innominate terms. Written contracts are proving of the both parties. If there is anything which is hide
from other party and after investigation t comes as a lie. Then there is no effect of policyholder’s
responses. As upheld in Poussard v. Spiers (1876) breach of the condition shall entitle the insurer to
repudiate the whole contract of insurance (Chirelstein, 2013). However, in the latter case the
policyholder has the right to raise the defense of acting in good faith. As mentioned in the facts she was
unaware about the actual and ignorance of facts is a valid defense under Common law. Parties must have
clear all the terms in the contract to deal with this. There should be the need to specify all the correct
information with the parties otherwise it will not give an effect to the contract.
Assignment/hand-out date: 26/09/2016
Deadline/hand-in date: 20/11/2016

Unit 5: Aspects of Contract & Negligence for Business
Unit code: F/601/1271
Unit type: Core
TASK 3
3.1
Contract liability: Parties are making various contract after accepting the terms of the agreement. Both the
parties come to make a valid contract by following the terms of the contract. In a business parties making
various types of transactions to deal with the goods an services (Eccles and Krzus, 2010). If any party
breaks any conditions or does not follow the instructions of the contract then it may occurs breach of the
liability. In this case Harvey v Facey [1893] AC 552 Privy council stated that no contract exist between
the parties. Facey did not gave the consent to the offer and both the parties does not show there intention
that the telegram was an offer.
Contrast liability: A person who has the negligence in his part of conduct is liable for the damage caused
to other person. Under the tort law there is a person who suffered from injury by the consequences of
another person then compensate the amount of loss.
Similarities:
Safety in the workplace is one of the most important things. The basic similarity is that it showed be
followed by any means. A person who has failed to do his duty he is liable to pay the amount in
case of breach of contract. Tort law also compensate the amount of another person's injury.
Differences are:
Parties should give their consent to make a contract law by agree on certain terms and conditions. In tort
law no party gives there consent and only one party who does his conduct by carelessness liable to
compensate the amount. By large, the risk in tort is intentionally embraced. While the tortuous is forced
by law.
A man who goes into a legally binding commitment owes an obligation just to a gathering to the
agreement. In tort, we owe an obligation to everybody not to stigmatize them, not to trespass on their
property and so forth.
The law of tort is essentially gotten from the writ of trespass. The law of agreement grew for the most
part from the three types of activity known as obligation, pledge and as sumps it.
Obligation of care:
The key segment of indiscretion is the authentic commitment of thought. This worries the relationship
between the respondent and the candidate, which must be with the end goal that there is a guarantee upon
the prosecutor to take fitting thought to keep away from conveying on harm to the irritated party in every
one of the conditions of the case. There are two courses in which a commitment of thought might be
assembled:
The disputant and applicant are inside one of the 'one of a kind relationship'; or
Outside of these associations, as showed by the benchmarks made by case law.
3.2
As depicted before that tortious responsibility pivots duties settled by law. As established in Donoghue v.
Stevenson (1932) the principle of negligence requires the parties to act in a careful and reasonable
manner, and not cause harm to anyone in the surrounding (Anson and et. al., 2010). While strict threat
is a standard for duty which may exist in either by a criminal or normal affiliation. A principle describing
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Deadline/hand-in date: 20/11/2016

Unit 5: Aspects of Contract & Negligence for Business
Unit code: F/601/1271
Unit type: Core
strict responsibility makes a solitary good fashioned at risk for the harm and hardship brought on by his
or her approvals and oversights paying negligible respect to culpability.
In the past the tort of lack of regard happened just in limited conditions as accident's all over the place.
Nowadays are any break of a legitimate commitment inciting setbacks to the inquirer achieved via lack of
regard. The case of Donoghue propounded the following elements of negligence:
 Duty of care: There shall be a specific duty imposed on the tortfeasor to act in a particular
manner.
 Breach of duty: The said duty of care should have been breached by the tortfeasor by not acting
in reasonable manner (Collins, 2016).
 Injury: The breach of the duty should have directly inflicted injury to the aggrieved party. In
furtherance to the same a direct nexus between the breach and injury shall be established.
 Remoteness: The consequence of the negligent act shall be foreseeable in nature.
They should all be demonstrated all together for the carelessness claim to be effective.
3.3
The common law doctrine of vicarious liability operates to make a person liable for the
unreasonable and negligent activities of another person. This is specifically made applicable on
relationships which are in nature of principal-agent. In London General Omnibus Co. (1862) it
was opined that the negligent act shall fall within the course of employment (Collins, 2016).
Authorized or un-authorized acts shall not make a difference in the liability of the employer.
Components for managers to consider
At the point when choosing what level of deterrent activity is sensible, a business ought to consider:
 the size and structure of the association
 accessible assets
 the way of the work attempted
 the work of ladies in nontraditional zones
 the quantity of junior staff
 the working environment culture
 social assorted qualities in the working environment
 any history of provocation
 any applicable arrangements in mechanical honors or assentions
 working hours
 level of supervision
Whatever other applicable element, for example, geographic detachment of the work area, obligations
which require working in close physical nearness, live-in courses of action, and so forth.
Assignment/hand-out date: 26/09/2016
Deadline/hand-in date: 20/11/2016

Unit 5: Aspects of Contract & Negligence for Business
Unit code: F/601/1271
Unit type: Core
TASK 4
4.1
Case 7
4.1.a) All around, a commitment of thought rises where one particular or social event grasps a
development which could sensibly hurt a substitute, either physically, normally, or fiscally. It is the duty
of a doctor to check patient, the doctor and hospital are both responsible because a life has been lost. A
Nurse in a doctor's facility has likewise responsible of negligence so hospital is responsible. In the event
of existence of contract of service between the doctor and hospital, and also if the cause of death was
consumption of the pain killers, the hospital could have been made responsible.
4.1.b) Torts are polite wrongs perceived by law as justification for a claim. These wrongs bring about a
damage or mischief constituting the premise for a case by the harmed gathering. For this situation, if
since the actual cause of death of Mr. Brown was pneumonia which was caused due to presence of toxic
mould in the room. Therefore, there does not exist any direct nexus between the breach of duty by the
doctor and the injury caused to Mr Brown to make the hospital liable. Hence, in the present case there is
not liability of the hospital.
4.2
For case 8, it is the responsibility of the company to appoint individual that are competent and
responsible. The company who hired a person who is careless and not serious should be blamed. In this
case the company is vicariously liable for the negligent act of of driver because they appointed a careless
person. The said act was within the course of employment and shall make the employer liable,
irrespective of being unauthorized in nature.
For case 9, it is the duty of the company to provide health insurance. Accidents can happen at any time.
Company should support their workers especially labor class because it is there responsibility. If an
accident has happened, then the company should provide assistance and support to the injured worker. In
light of this it can be inferred that the company can be made vicariously liable for the actions of the
employees and is required to pay damages to the injured employee. Moreover, the defense of some other
agency being responsible for the safety of the employees shall not hold any relevance in making the
company liable. However, the company shall still be entitled to recover the said amount from the
concerned agency.
CONCLUSION
Through the above dialog and the examination for the supporting cases and given situations, this report
has propelled such gigantic data of authoritative law and law of torts. Individuals can get the
understandings from the hypothesis to have the capacity to separate law of agreement and law of torts.
This report analyses the contract law by agreeing on the terms to the document. A person is liable for his
negligence if another person suffers from any injury or loss. There are various business sceneraio where
law of contract and tort applies to the parties which is enforceable by law.
Additionally, individuals can have enough information to have the capacity to examinations and fathom
the diverse down to earth utilizations of legally binding obligation and tortious risk zones.
Assignment/hand-out date: 26/09/2016
Deadline/hand-in date: 20/11/2016

Unit 5: Aspects of Contract & Negligence for Business
Unit code: F/601/1271
Unit type: Core
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Assignment/hand-out date: 26/09/2016
Deadline/hand-in date: 20/11/2016